U.S. bank credit is growing at the fastest pace in three years,giving the Federal Reserve confidence in the economic expansion'sstaying power.

Financial institutions increased commercial and industrial loansby an average annual pace of almost 10 percent in the thirdquarter, the highest since the comparable quarter in 2008, comparedwith a 1.7 percent decline in the past four years, according to Feddata. The latest numbers show loan growth of 15 percent, seasonallyadjusted, in October and 6.1 percent in November.

The resumption in lending means a projected fourth-quarterpickup in gross domestic product may be sustained next year evenamid Europe's sovereign-debt crisis, said Robert McTeer, formerFederal Reserve Bank of Dallas president. He predicts the centralbank's policy group, which has moved to push down long-terminterest rates and pledged to keep its benchmark federal funds ratenear zero through mid-2013, probably won't approve new monetaryeasing at its Dec. 13 meeting.